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AGREEMENT between the Central Bank of the Russian Federation (Bank of Russia) and the National Bank of Georgia on Co-operation in Supervising the Activities of Credit Organisations

The Central Bank of the Russian Federation (Bank of Russia) and the National Bank of Georgia, hereinafter referred to as “Parties”, expressing their mutual interest in establishing and promoting bilateral ties in banking supervision and wishing to achieve mutual understanding on issues related to banking regulation and cooperation in supervising the activities of credit organisations, have agreed as follows:

1. The Parties express the readiness to exchange information regularly on the state and development of each other’s banking system.

2. The Parties shall regularly provide, on a reciprocal basis, information on applicable national banking legislation, banking supervision standards and requirements and major changes in them.

3. The Parties agree to hold, if necessary, meetings between the heads of the banking supervision agencies (units) and/or between experts to discuss questions of mutual interest and ways to improve supervision over the activities of credit organizations in order to ensure reliability and efficiency of the national banking systems of the Parties.

For the purposes of this Agreement, the Parties shall mean by credit organizations the banks and non-bank credit organizations (organizations conducting individual kinds of banking operations) whose activities are subject to licensing and banking supervision by the Parties. Credit organizations shall be recognised as subsidiary credit organizations in accordance with the requirements of the national legislation of the Parties.

4. The Parties agree to take joint actions in supervising the activities of the self-contained units (representative offices and branches) and subsidiary credit organizations, founded by credit organizations situated in the territory of the country of the other Party and also in exercising control over the share participation of credit organizations of the Parties in each other’s authorized capital, specifically,

4.1. in the process of licensing banking activities the Parties agree that

4.1.1. should a credit organization situated in the territory of the country of the other Party request the Party to grant it permission to open self-contained units and subsidiary credit organizations or participate in the authorized capital of a credit organization and also license branches and subsidiary credit organizations, the Party shall consider such requests after written consent given by the other Party within the time-limits established by the national legislation on banking regulation. The Parties shall provide by mutual consent supervisory information on the credit organization situated in their territory and opening self-contained units and/or subsidiary credit organizations and/or participating in the authorized capital of credit organizations situated in the territory of the country of the other Party. The content of supervisory information on a credit organization shall be determined in the course of implementation of this Agreement;

4.1.2. when considering requests by credit organizations to grant them permission to open self-contained units and subsidiary credit organizations and participate in the authorized capital of credit organizations and also to issue banking licences for branches and subsidiary credit organizations, the Parties express the readiness to provide each other with additional supervisory information necessary for making a final decision;

4.1.3. in making decisions to grant permission to open self-contained units and subsidiary credit organizations and participate in the authorized capital of credit organizations and also to issue licences for branches and subsidiary credit organizations, the Parties shall be guided by the requirements of their national legislation and take into account the supervisory information they have received from the banking supervision authorities of the other Party;

4.1.4. the Parties shall inform one another in writing about the decision made on granting permission to credit organizations situated in the territory of the country of the other Party to open self-contained units and subsidiary credit organizations and participate in the authorized capital of credit organizations and on licensing branches and subsidiary credit organizations.

4.2. In exercising prudential supervision or examinating reports submitted by operating branches and subsidiary credit organizations, founded by credit organizations situated in the territory of the country of the other Party, the Parties shall agree that

4.2.1. the banking supervision authorities shall exercise prudential supervision over the activities of branches and subsidiary credit organizations in accordance with the national legislation on banking regulation;

4.2.2. the banking supervision authorities shall not prevent branches and subsidiary credit organizations from submitting to the founder credit organization the reports it needs to compile consolidated reports in accordance with the forms adopted in the home country of the founder credit organization and submitting reports by them at the request of the banking supervision authority of the home country of the founder credit organization;

4.2.3. the banking supervision authorities of the Parties shall provide at the request of the banking supervision authorities of the other Party additional supervisory information on the branches and subsidiary credit organizations situated in the territory of their countries, which is necessary for the implementation of prudential supervision over the activities of the founder credit organization on a consolidated basis.

4.3. in conducting on-site inspections by the Parties,

4.3.1. the banking supervision authorities of the host country of branches and subsidiary credit organizations shall not obstruct and, if necessary, shall assist the banking supervision authorities of the other Party in organising and conducting inspections of the branches and subsidiary credit organizations. The Parties shall not prevent representatives of the banking supervision authorities of the other Party from participating in the inspection as experts (observers);

4.3.2. should the banking supervision authorities of the host country of branches deem it necessary to inspect them they inform about it the banking supervision authorities of the other Party and carry out such inspections independently or jointly with the banking supervision authorities of the other Party;

4.3.3. the banking supervision authorities of the Parties express the readiness to provide at the request of the banking supervision authorities of the other Party supervisory information received as a result of the latest inspection of a branch and subsidiary credit organization.

4.4. in monitoring compliance by credit organizations situated in the territory of the countries of the Parties with the instructions of the banking supervision authorities to rectify the faults uncovered in their activities, the Parties

4.4.1. shall provide, on a reciprocal basis, information about any significant changes pertaining to the credit organizations that have self-contained units and subsidiary credit organizations and participate in the capital of credit organizations situated in the territory of the country of the other Party, such as the restriction of the range of banking operations, the suspension and revocation of licence, the appointment of provisional administration in a credit organization and the reorganization or liquidation of a credit organization;

4.4.2. shall not prevent representatives of the banking supervision authorities of the other Party from supervising compliance by branches and subsidiary credit organizations with the instructions of the banking supervision authorities of the other Party.

5. All information about credit organizations and their self-contained units and subsidiary credit organizations received by the Parties from each other as a result of the exercise of their supervisory functions shall be considered strictly confidential, shall not be passed to a third party and shall be used by the banking supervision authorities exclusively for the implementation of their supervisory functions.

6. This Agreement shall enter into force as of its signing by both the Parties and it shall be effective until December 31, 1998.

The term of this Agreement shall be considered automatically extended for each subsequent calendar year if neither Party submits a notice of its termination by November 1 of the current year.

Done on.........................., 1997, in the city of Moscow, in two copies in Russian, two copies in Georgian and two copies in English. All the three texts of each copy being equally authentic. Should any discrepancy occur in the translation of the texts, English shall be considered the main language.

On Behalf of the Central Bank
of the Russian Federation
On Behalf of the National Bank
of Georgia
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Last updated on: 29/10/2018